Bioherbalai Inc. v. Swingthink Inc., 2009 CanLII 51201 (ON SCDC)

COURT FILE NO.: DC-09-63-ML

DATE: 20090928

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: BIOHERBALAI INC. – and – SWINGTHINK INC.

BEFORE: Lemon J.

COUNSEL: Lisa Toner, for the Plaintiff

Michael Burgar, for the Defendant

HEARD: September 15, 2009

E N D O R S E M E N T

1The plaintiff was unsuccessful at trial and seeks leave to appeal the trial judge’s order with respect to costs. I heard argument and reserved my decision. The following are my reasons and order.

2On July 8, 2009, MacKenzie J. ordered the plaintiff to pay costs fixed in the amount of $32,307.14. This was a trial under the Simplified Rules that took three days to try followed by written argument. At the end of the trial, MacKenzie J. dismissed both the plaintiff’s claim and the defendant’s counter-claim. The parties agree that very little time was spent on the defendant’s counter-claim. Both parties submitted that it was appropriate to have the matter tried upon oral evidence rather than affidavits. They agreed that a summary trial would not have been sufficient.

3Justice MacKenzie received written submissions from the parties and rendered his decision. In his endorsement, he considered the submissions of the parties; the offers that were made; and the law relating to those offers. He also considered the plaintiff’s submission that costs incurred under a Rule 76 proceeding should be reasonable and proportionate to the amount recovered. He reviewed the principles of Trafalgar Industries of Canada Ltd. v. Pharmax Ltd. (2003), 2003 40313 (ON SC), 64 O.R. (3d) 288 (S.C.J.).

4The parties dispute the test to be applied by me to grant or refuse leave. I do not believe that much turns on that issue. The defendant says that leave to appeal should be granted sparingly and only in obvious cases; there must be strong grounds upon which the appellate court could find that the judge erred in the exercise of his discretion. The plaintiff says that leave to appeal shall not be granted unless there appears to be good reason to doubt the correctness of the order in question and the proposed appeal involves matters of such importance that leave to appeal should be granted. The plaintiff sets a higher hurdle for itself than does the defendant. The difference between the parties on the second branch of the test is a matter of semantics. I do not find it helpful to consider the difference between whether I have “good reason to doubt the correctness of the order” and whether “there are strong grounds upon which the appellate court could find that the judge erred in the exercise of his or her discretion”. For the following reasons, I find that the plaintiff has not met any of the tests.

5I agree with the plaintiff’s submission that the assessment of costs in matters of the Simplified Rules are difficult to predict. However the Divisional Court in Andersen v. St. Jude Medical Inc. 2006 85158 (ON SCDC), [2006] O.J. No. 508 (Div. Ct.) has clarified this perplexing area to the extent possible. Accordingly, determination of this costs order, while very important to the litigants, is not important to the community at large.

6The plaintiff admits that there is no rigid rule or formula that a judge must adhere to when fixing costs. The exercise of fixing costs is not a mathematical calculation but is an assessment by the judge of what is fair and reasonable in the circumstances. However the plaintiff goes on to submit that where a costs order is significantly higher than any other awards in similar cases, and where it does not appear that the judge awarding costs considered other costs awards in similar proceedings or the reasonable expectations of the parties, leave should be granted.

7In its submission that this order was inconsistent with other similar cases, the plaintiff referred to a number of cases in its factum as follows:

Case	Tab #	Length of Proceeding	Amount at Issue / Judgment	Costs
Trafalgar1	5	5 days	$26,978.84	$12,000.00
Murphy2	12	5 days	Claim $51,000.00 Damages $10,000.00	$18,000.00
Riegling3	13	3 days	$22,500.00	$8,500.00
Bennett4	14	1 ½ days	$18,544.00	$15,000.00
Leling5	15	1 day then non-suit	$48,362.00	$16,000.00
Culligan6	6	7 ½ days	$50,000.00	$40,000.00

8In my view, this case law defeats the plaintiff’s submission. In Bennett, costs were awarded in the amount of $15,000.00 for a trial one half the length of this case. In Leling, costs were ordered in the amount of $16,000.00 for a one day trial. Each case will be determined on its own facts and, barring exceptional circumstances, the trial judge is in a better position to assess the costs than a judge on a motion for leave.

9Be that as it may, Justice MacKenzie was clearly alive to the issue of proportionality. I am not prepared to say that MacKenzie J. was wrong in his assessment of what was fair and reasonable. Taking his order into consideration with the cases put forward by the plaintiff, I have no good reason to doubt the correctness of the order in question. There are not strong grounds upon which an appellate court could find that the judge erred in the exercise of his discretion. Accordingly, the motion is dismissed.

10I must then determine the costs of this motion. Both counsel provided me with their bills of costs for my review after determining the issue. The plaintiff has provided a costs outline in the amount of $12,122.50. The defendant proposes costs in the amount of $3,483.35. I am advised that there were no offers to settle that would impact on my assessment of costs. The defendant has been entirely successful. Given the differences between the two bills of costs, I do not think that the plaintiff could submit that the defendant’s outline is unreasonable. Accordingly, costs are fixed in the amount of $3,483.35 to be payable by the plaintiff to the defendant within thirty days.

Lemon J.

Footnotes

1. 1Trafalgar Industries of Canada Limited v. Pharmax Limited, (2003), 2003 40313 (ON SC), 64 O.R. (3d) 288
2. 2Murphy v. Bavarian Motors Inc., 2006 10218 (ON SC), 81 O.R. (3d) 65
3. 3Riegling v. Ouellette (c.o.b. Designers Building Group), [2009] O.J. No. 2933
4. 4Bennett v. Cunningham, [2007] O.J. No. 296
5. 5Leling Phoenix Brake Canada v. Halajian, [2006] O.J. No. 2701
6. 6Culligan Springs Ltd. v. Dunlop Lift Truck (1994) Inc. 2006 13419 (ON SCDC), [2006] O.J. No. 1667